USD/JPY engaged in sideways trading below 159.02 last week. Initial bias remains neutral this week. On the upside, a break above 159.02 will resume the rebound from 152.87 toward the 160.38 key structural resistance. However, a break of 156.36 will bring a deeper fall back to 152.87 support instead.
Medium-Term Picture
Price action from the 163.97 medium-term top is seen as correcting the rise from 139.87. The first leg of this correction could have completed at 152.87, just ahead of the 152.25 structural support. A sustained break above the 55-day EMA (now at 158.09) would pave the way back to retest the 163.97 high. Nevertheless, strong resistance should be seen there to cap the upside, and there will likely be another falling leg before the corrective pattern completes.
Long-Term Picture
The long-term outlook will stay bullish as long as the 139.87 support holds, even in the case of a deep pullback. The uptrend from 75.56 (the 2011 low) is still favored to resume after the current correction from 163.97 completes.
